Fed Rate Hike Sparks Market Volatility as Retail Sales Surge
The stock market saw significant fluctuations after the Federal Reserve's decision to raise interest rates by 25 basis points. The S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) both closed below their morning highs, with SPY experiencing a 0.44% loss and QQQ rising 0.03%. This move brings the target range to 3.75%, 4.00%, with 12 of 18 Fed officials anticipating another hike by the end of the year.
Fed Chair Kevin Warsh emphasized that the central bank has removed a 'dose of accommodation' and that recent inflation data does not signal a downward trend to 2%. However, he declined to provide guidance on future rate adjustments. Meanwhile, retail sales posted a monthly gain of 1.2% in August, exceeding estimates and marking the fastest growth since March.
Other market movers included Brent crude oil (BZ), which fell 2.93% after Saudi Arabia announced its East-West pipeline could return to half capacity following a drone attack. Additionally, Nvidia (NVDA), Alphabet (GOOGL), and Emerald AI launched the AI Energy Management Alliance (AEMA) to improve data center electricity efficiency.